Senior Housing Recap
In June, we shared an article addressing how the pandemic affected the senior housing sector. We explained what changes the senior housing industry needed to consider for a comeback in the post-pandemic economy.
The senior housing sector was hoping for a rebound in occupancy within 2021. Since then, the senior housing category has experienced the increase they were waiting for. Time will tell if the trend will continue. But for now, there is a positive trajectory in this segment.
Senior Housing and Healthcare Real Estate
While senior housing properties can fall into the multifamily housing sector, some facilities are also considered healthcare properties. Skilled nursing facilities (SNF), for example, serve residents who need continual medical care.
Medical real estate practices, such as HBRE, can assist those who own or lease senior living facilities. Healthcare advisors are familiar with some particular regulations surrounding healthcare properties. And because of their experience in the healthcare industry, healthcare CRE advisors have a wealth of business partnerships to serve their clients.
Senior Housing Occupancy Increase
The senior housing sector showed promising results in the third quarter of 2021. With the increase in vaccinations, residents began moving into senior housing properties once again. Annual comps also revealed that rents have increased by over 1%.
The Skilled Nursing category of senior housing wasn’t as strong. According to GlobeSt.com, November occupancy was 76.2%. Compared to 2019, it is down 1,000 basis points. But over the last decade, the daily rate has either been consistent or has increased.
The GlobeSt.com article referenced above suggests that fewer senior housing developments have broken ground recently. And yet, there is hope for expansion in the future. The article cites an industry researcher who predicts that demand for this sector will eventually grow. Investors who were cautious about their capital during the first part of the pandemic might now begin to put it to use. Of course, uncertainty in the market may cause many investors to remain cautious for a while. But as of early November 2021, sales volume had already reached the 2020 totals.
The Future of Senior Housing
As we mentioned in our June article, senior housing facilities may need to make a few changes to adapt to their new residents’ expectations. Property owners should address location, on-site amenities, and physical structure/layout. The oldest of the baby boomer generation is in their mid-seventies now, and one source suggests that their generation is vastly different from the generation before. They have different experiences due to modern culture, and they will anticipate more choices for their living environments.
In response to these expectations, one architect explains that senior housing properties should offer smaller community areas with more technology and entertainment resources. Some properties are now avoiding large, single buildings and building smaller housing units instead to allow the property to feel more like a neighborhood.
Whether the new senior housing building styles and trends apply to each market is up for detailed review. Not all housing types will apply to every community. For example, while there may be a trend for more senior housing facilities in downtown areas, large senior housing facilities might not fit in densely populated locations. Thorough market research should come before investors or property owners engage in site selection. That is one reason commercial real estate advisors are essential to the senior housing sector.
HBRE: A Healthcare Real Estate Practice
HBRE is a healthcare real estate practice, solely focusing on those who build, purchase, sell, or lease commercial assets. Collectively, our team has decades of experience in commercial real estate and has an extensive history in the healthcare sector. Investors, landlords, tenants, or owners of senior housing facilities can trust that our team has the resources and skills to assist with any of their commercial real estate needs. As occupancy trends upward, our team is prepared to facilitate transactions or lease deals that best serve our healthcare real estate clients.
If you are interested in learning more about investing in commercial real estate, or if you have questions about buying, selling, or leasing a commercial property, please contact an HBRE advisor. Our team of experienced CRE professionals have the skills and insight to assist with all property transactions. To reach out to us directly, email [email protected] or call 615-564-4133.
